COPENHAGEN—Denmark’s largest bank found more than $200 billion in transactions at its Estonian branch and suspects a “large portion” of it was related to money laundering, often from Russia. The CEO stepped down as a result of the year-long investigation.

Danske’s CEO Thomas Borgen said “it is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia,” adding the investigation didn’t find breaches of his legal obligations. Mr. Borgen will stay until a replacement is appointed, the company said.

The size of the scandal has hammered its shares and raised concerns about a bank that holds more than a third of the country’s customer deposits.

Danske’s woes began in early 2017 when the lender became embroiled in a series of money-laundering cases involving its branch in Estonia, a eurozone country formerly part of the Soviet Union that became a preferred destination for money launderers, particularly from Russia.

On Wednesday the bank said about €200 billion of money ($233 billion) moved through the Estonian unit from 2007 to 2015. A large part of the payments were likely suspicious, it said. Investigators looked at 15,000 customers, before focusing on 6,200 who they believe deserved serious scrutiny for signs of money laundering. Of that 6,200, “the vast majority of these customers have been deemed suspicious,” the report concluded.

“There is suspicion that there have been employees in Estonia who have assisted or colluded with customers,” the bank said in a press release.

Danske has been slow to respond to the growing scandal, and it only launched an in-depth investigation into the matter in September of last year. The branch is the subject of investigation by U.S. authorities, and Danish and Estonian prosecutors.

Denmark’s banking supervisor in May reprimanded Danske for weak controls and ordered it to hold $800 million more in capital. In its ruling it described repeated inaction from the bank’s management. It said warnings were softened when passed on to the board. Despite being warned of trouble within its portfolio of nonresident customers in 2013, the bank didn’t start shutting the accounts down almost two years later, according to the supervisor.

Danske said Wednesday that the investigation found a number of former and current employees, both at the Estonia branch and in the headquarters, “didn’t comply with legal obligations” of their employment. It has reported some to the Estonian authorities, including the police.